Constellation Brands Inc Class A (STZ)

Interest coverage

		Feb 29, 2024	Feb 28, 2023	Feb 28, 2022	Feb 28, 2021	Feb 29, 2020
Earnings before interest and tax (EBIT)	US$ in thousands	3,169,700	2,842,900	2,331,700	2,791,100	2,154,500
Interest expense	US$ in thousands	1,400	1,100	500	32,000	37,900
Interest coverage		2,264.07	2,584.45	4,663.40	87.22	56.85

February 29, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $3,169,700K ÷ $1,400K
= 2,264.07

Based on the data provided, the interest coverage ratio of Constellation Brands Inc Class A has fluctuated over the past five years. In FY2020, the interest coverage was 56.85, indicating the company's ability to cover its interest expenses 56.85 times over with its earnings before interest and taxes. In the following fiscal year, FY2021, the interest coverage ratio decreased significantly to 87.22, still indicating strong coverage but a slight decline from the previous year.

However, in FY2022, there was a notable increase in the interest coverage ratio to 4,663.40, which signifies a substantial improvement in the company's ability to cover its interest payments with its operating income. This increase could be attributed to either a significant increase in operating income or a decrease in interest expenses during that period.

In FY2023, the interest coverage ratio continued to be strong at 2,584.45, albeit slightly lower than the previous year. Finally, in the most recent fiscal year, FY2024, the interest coverage ratio further decreased to 2,264.07, indicating that the company's earnings before interest and taxes may not be as robust relative to its interest expenses as in the previous years.

Overall, the trend in Constellation Brands Inc Class A's interest coverage ratio demonstrates some fluctuations over the years, with significant improvements in some years and slight declines in others. Investors and analysts should monitor these ratios closely to assess the company's financial health and its ability to meet its debt obligations.